Areas of Expertise
Notice under Section 142(1)
Section 142(1) of the Income Tax Department to issue notices in two situations
- When you file an income tax return: If the department requires further clarification or additional details about your return to complete your assessment, they can issue a notice under Section 142(1).
- When you haven't filed an income tax return: If you haven't filed your return by the deadline, a notice u/s 142(1) acts as a reminder and asks you to submit the necessary information in a specific format.
Notice sent under Section 139(9)
This notice is issued by the Income Tax Department in India to inform you that your filed income tax return (ITR) is considered defective. This means there are inconsistencies or missing information that need to be addressed.
There are several reasons you might get a notice u/s 139(9), including:
- Mismatched TDS details: Discrepancies between the Tax Deducted at Source (TDS) information in your ITR and the Form 26AS (tax credit statement).
- Incomplete or inaccurate information: Missing details in your ITR or errors in income or deduction amounts
- Late filing: Filing your return after the due date without a valid reason.
Notice under Section 148
The Income Tax Department in India can issue a notice under Section 148 to a taxpayer if there's reason to believe some income wasn't included in their tax assessment. This essentially means the department suspects income has 'escaped assessment.'
Reasons for a Notice under Section 148:
- The Income Tax Department suspects unreported income based on strong evidence, not just suspicion.
- The evidence must clearly link to the taxpayer potentially evading taxes in a specific year.
- The department can't issue a notice based solely on information already provided by the taxpayer.
- New information or discrepancies not previously disclosed can trigger a notice.
Notice under Section 245
Also known as a 'Refund Adjustment Notice,' it is issued when the Income Tax Department adjusts any tax refunds due to the taxpayer against outstanding tax demands.
- Outstanding Tax Demands: The notice is issued when the taxpayer has outstanding tax demands, which may include unpaid taxes, interest, or penalties.
- Refund Adjustment: The Income Tax Department adjusts any tax refunds due to the taxpayer against these outstanding tax demands to recover the dues.
Notice under Section 271
This notice is issued when the department intends to levy penalties for various non-compliances, such as underreporting or concealing income, failure to maintain proper books of accounts, or failure to comply with tax laws.
- Non-compliances: The notice is issued when the taxpayer is found to have committed various non-compliances, such as underreporting or concealing income, failure to maintain proper books of accounts, or failure to comply with tax laws.
- Penalties Levied: The department intends to levy penalties as per the provisions of the Income Tax Act to discourage such non-compliances and ensure adherence to tax regulations.
Notice under Section 143(2)
Issued after the initial processing of the tax return, this notice requires the taxpayer to attend a tax assessment proceeding conducted by an assessing officer. It is a part of the scrutiny assessment process.
- Scrutiny Assessment: The notice is part of the scrutiny assessment process initiated by the Income Tax Department to verify the accuracy and completeness of the taxpayer's return.
- Verification of Details: The taxpayer must attend a tax assessment proceeding conducted by an assessing officer, where the details provided in the tax return are scrutinized, and any discrepancies or irregularities are addressed.
- Ensuring Compliance: The notice aims to ensure compliance with tax laws and prevent tax evasion or underreporting of income by providing an opportunity for a detailed examination of the taxpayer's financial affairs.
Notice sent under Section 156
This is a demand notice informing the taxpayer about outstanding tax liabilities. It includes the principal tax amount along with any interest and penalties levied for non-compliance, late payment, or under-reporting of income.
Reasons for a Notice under Section 156:
- Outstanding Tax Liability: The taxpayer has an outstanding tax liability per the assessment order, and the notice under Section 156 demands payment.
- Tax Due on Reassessment: If the income tax department reassesses the taxpayer's income and determines additional tax liability, a notice under Section 156 is issued to demand payment of the reassessed tax.
- Arrears of Tax: It could be issued for arrears of tax due from the taxpayer for any previous assessment year(s).
- Interest and Penalty: Besides the principal tax amount, the notice under Section 156 may include demands for interest and penalties levied for non-compliance, late payment, or under-reporting of income.
- Adjustment of Refunds: Sometimes, if there are pending tax demands against the taxpayer, the income tax department may adjust any tax refunds due to the taxpayer against the outstanding demand. A notice under Section 156 would inform the taxpayer of this adjustment.
- Response to Assessment Order: Following the issuance of an assessment order, the notice under Section 156 serves as a formal communication of the assessed tax liability and the deadline for payment.
- Initiation of Recovery Proceedings: If the taxpayer fails to pay the tax demand mentioned in the notice under Section 156 within the stipulated timeframe, it could lead to recovery proceedings by the income tax department, including actions like attachment of assets or bank accounts.
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